Investor Michael Burry warns of AI bubble 'too big to save'

Michael Burry believes the surge in AI is a colossal bubble, and nothing can prevent its eventual burst from affecting the stock market and the economy.

"The government will pull out all the stops to save the AI bubble to save the market to save the economy," Burry wrote on X late Tuesday. "The problem is too big to save."

The renowned "The Big Short" investor expressed this bleak outlook in response to a message by George Noble, a former hedge fund manager and ex-associate of the celebrated investor Peter Lynch at Fidelity.

Noble mentioned that "OPENAI IS COLLAPSING IN REAL TIME." He highlighted the numerous challenges facing the ChatGPT developer, such as intense rivalry with Google's Gemini 3 and other AI systems, escalating expenses, increasing losses, and Elon Musk's lawsuit against it.

"This outcome isn’t shocking and won't conclude with OpenAI," Burry mentioned on X (formerly Twitter). The enormous financial resources "being utilized and loaned by the world's wealthiest companies won't afford sufficient time—it's the very essence of a mania."

Burry, who shifted from operating a hedge fund to authoring on Substack late last year, highlighted OpenAI in his initial post for its "aspirational" goal of spending $1.4 trillion over eight years.

Burry has also compared Sam Altman's enterprise to an internet bubble casualty. "OpenAI is similar to Netscape, destined to fail and rapidly depleting cash," Burry wrote in early December.